Legalese — What is Money?

Only a lawyer could make the question, "What is money?" require a 21 page answer.

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What is money?

Seems like a simple question, right? Money is your bank balance. Money is the paper bills in your wallet. Money is the coins you find between your sofa cushions and under your pillow after the tooth fairy has come to visit. Money is a word that even small children are comfortable using. It isn’t complicated or sophisticated. It’s the stuff you use to buy other stuff. It’s the stuff you get when you get paid to do stuff.

Enter lawyers, who are super good at confusing simple things. Both of you who read my very first Legalese column may remember that I wrote about how Legalese is a language that looks and sounds suspiciously like English, but isn’t. In that column, I wrote about how the courts have argued about the definition of the word “chicken.” (Sure, the thing with feathers that clucks and lays eggs is a chicken, but what about a nugget? A skinless, boneless chicken breast? Are those things chickens when it comes to the regulatory laws about chickens?)

Just a few weeks ago, in June 2018, the United States Supreme Court, in a 5-4 opinion, ruled on what “money” is in a particular context. The case is called Wisconsin Central, Ltd. V. U.S. The facts of the case are dry and semi-complicated, as all things related to taxation are, but come down to this: In 1937, during the depression and before the Eisenhower interstate system was built, railroads were critical to the American economy. A law was passed to make sure that the industry would be preserved – the rail roads paid a tax based on the employees’ incomes, and in exchange, the employees got a federal pension more generous than Social Security. This law is still in effect. The problem came when the railroads started issuing stock options to employees as performance incentive: did these stock options count as income that would be taxable under this law?

The law itself said that “any form of money remuneration” is taxable. The specific question before the court was “Do stock options count as any form of money remuneration,” which further boiled down to, “are stock options money?”

The result was a ten page majority opinion, written by Justice Neil Gorsuch, and an eleven page minority opinion, written by Justice Stephen Breyer. That’s right. Twenty one pages of typewritten argument about what money is.

Dictionaries were consulted. Webster’s. Oxford. Black’s Law Dictionary. The majority via Justice Gorsuch said things like, “Baseball cards, vinyl records, snow globes, and fidget spinners all have “value expressible in terms of money.” Even that “priceless” Picasso has a price. Really, almost anything can be reduced to a “value expressible in terms of money.” But in ordinary usage does “money mean almost everything?” All the inner quotation marks and italics make me picture Justice Gorsuch using air quotes while speaking and maybe shouting a little on the italics. I’m also fairly certain that this is the United States Supreme Court’s very first reference to a fidget spinner.

This was countered by the dissent who focused more on the phrase “any form” in the original statute. They said, via Justice Breyer, “A railroad employee cannot use her paycheck as a “medium of exchange.” She cannot hand it over to a cashier at the grocery store; she must first deposit it. The same is true of stock, which must be converted into cash and deposited in the employee’s account before she can enjoy its monetary value. Moreover, what we view as money has changed over time. Cowrie shells once were such a medium but no longer are….Nothing in the statute suggests the meaning of this provision should be trapped in a monetary time warp, forever limited to those forms of money commonly used in the 1930’s.”

To a normal human, these seems like fairly-boring, hair-splitting arguments. To a lawyer, this is passionate language that makes me certain the Justices went home that evening with steam coming off of the top of their heads, pining for a glass of single malt Scotch.

To sum up, in the narrow context of railroad pensions, “any form of money remuneration” does not include stock options. They didn’t touch the issue of Bitcoin. I’m guessing that’s next.

Nothing in this article should be construed as legal advice. It is being offered for informational purposes only.